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Hampstead, Md.-based Jos. A. Bank earlier Wednesday morning confirmed its nonbinding proposal to combine the two men's apparel retailers and create a chain with more than 1,700 stores.

Men's Warehouse shares were surging 28% to $45.17 while Jos. A Bank was gaining 8.5% to $45.12 in mid-day trading.

Jos. A. Bank in late September proposed to acquire Men's Wearhouse shares for $48 apiece, a premium of 36% to the target's Tuesday close. The deal would be funded via cash on hand, new debt and a $250 million equity infusion to be provided by Golden Gate Capital.

Jos. A Bank said that the deal values Houston-based Men's Wearhouse at 8.4 times its 12-month Ebitda.

In June, after founder George Zimmerwas ousted from Men's Wearhouse, its board said "now is not the time to sell the company."

Jos. A Bank said its offer would give Men's Wearhouse holders a significant premium, while creating a larger platform in which to sell from.

"We believe Men's Wearhouse's shareholders would want their board to explore with us the immediate and certain value they would receive in a transaction," Jos. A. Bank chairman Robert N. Wildrick said in a statement. "We have always admired Men's Wearhouse and believe these two great companies, when combined, will create continued growth and sustainable value for our shareholders, greatly enhanced benefits for our customers, and exciting opportunities for our employees."

Jos. A Bank is a smaller company than Men's Wearhouse, with 600 retail locations compared to Men's Wearhouse's 1,137 locations. The market values Jos. A. Bank at $1.2 billion, about $500 million less than Men's Wearhouse's market capitalization.